“Markets in Toronto and Montreal are cooling, but we think they will avoid major downturns, partly because, on the demand side, demographic requirements remain decent,” reads a recent report from the Conference Board of Canada, released says. “Also, the banks will continue to require builders to have healthy pre-sale levels before advancing construction financing, keeping supply somewhat in check.”
That’s relatively good news for both condo investors and real estate agents plying their trade in that market. The analysis also flies in the face of rampant speculation earlier this year that condo supply – especially in Toronto and Vancouver – had far outstripped demand.
While acknowledging the modest price drops in key Canadian markets, the Conference Board report asserts that the market has effectively stabilized. Again the increasing pull of urban living is largely responsible.
“While regional markets clearly vary in strength,” says the report. “All will benefit from an expanding population and a rising share of condominium-loving empty-nesters aged 55 or more.”
Still, there is something blowing in the wind that threatens to topple the applecart.
The Office of the Superintendent of Financial Institutions continues to weigh the need to further tighten underwriting guidelines for federally regulated lenders. Such a move, coupled with rising interest rates, could further slow the condo market, say experts.
Real estate agents, particularly those in urban centres, would feel that pinch.
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